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The five permanent members of the UN Security Council, along with Germany, are continuing their efforts to craft a new package of incentives and disincentives designed to persuade Iran to end its gas centrifuge-based uranium-enrichment program. Meanwhile, Secretary of State Condoleezza Rice announced a significant U.S. policy shift May 31 by dangling the prospect of direct talks before Tehran.

In late May, China, France, Germany, Russia, the United Kingdom, and the United States resumed their efforts to devise an offer after the Security Council failed earlier in the month to agree on the text of a legally binding draft resolution on Iran’s nuclear program. France and the United Kingdom introduced the draft resolution after International Atomic Energy Agency (IAEA) Director-General Mohamed ElBaradei reported in late April that Iran had failed to heed a nonbinding March presidential statement from the council. That statement had urged Iran to take several steps, including resuming a suspension of its enrichment program and increasing its cooperation with an agency investigation of Iran’s nuclear activities. (See ACT, April 2006.)

But the European resolution met resistance from Russia and China because it would have invoked Chapter VII of the UN Charter, which allows the Security Council to take punitive action, such as imposing sanctions or using military force, “to maintain or restore international peace and security.”

Moscow and Beijing have expressed skepticism about the efficacy of sanctions and have also been resistant to invoke Chapter VII, fearing that it could give Washington a pretext to take military action against Iran. (See ACT, May 2006.)

Russian Foreign Minister Sergei Lavrov said May 16 that “neither Russia nor China will be able to support” a Security Council resolution “that would contain a pretext for coercive, let alone military, measures,” the Interfax news agency reported. But John Bolton, U.S. permanent representative to the United Nations, downplayed such fears while speaking to reporters May 5, saying that Chapter VII was merely being used because it is required to make Iran’s compliance with the resolution mandatory. Washington is willing to consider other formulations that would make the resolution’s demands legally binding without invoking Chapter VII, Bolton added.

Bolton also said that the United States would like the Security Council to adopt a unanimous resolution but added that Washington does not want “unanimity at any price.” He suggested that the United States might seek a vote on a resolution, even if Russia or China were to object.

Bolton also reiterated that Washington might take action outside the council by undertaking measures with other like-minded countries to constrain Iran’s nuclear ambitions. For example, the Bush administration is seeking to persuade institutions in Europe, Japan, and the Persian Gulf to halt financial transactions with Iranian entities. (See ACT, May 2006.)

Whether Tehran’s compliance with the Security Council’s requests would satisfy Washington remains unclear. Undersecretary of State for Arms Control and International Security Robert Joseph would not directly respond when asked during a May 18 interview with Arms Control Today if such compliance would be sufficient to address U.S. concerns about Iran’s nuclear program. He did say that a re-suspension of Iran’s enrichment program was a sina qua non.

Iran has a pilot centrifuge facility and is constructing a larger commercial facility. Tehran has told the IAEA that the pilot and commercial facilities will eventually contain approximately 1,000 and 50,000 centrifuges, respectively. Gas centrifuges enrich uranium by spinning uranium hexafluoride gas at very high speeds in order to increase the concentration of the uranium-235 isotope. Iran also has a conversion facility for turning lightly processed uranium ore into uranium hexafluoride.

Iran suspended the program in late 2004 before beginning negotiations with France, Germany, and the United Kingdom designed to resolve international concerns about its enrichment program. Those negotiations ended when Iran restarted its uranium-conversion facility last August. (See ACT, September 2005.)

Proposal Discussions

Since the early May setback, diplomats representing the permanent Security Council members and Germany have been circulating drafts of the European proposal in an attempt to reach a consensus, a European diplomat familiar with the discussions told Arms Control Today May 26. The Europeans are trying to unify the Security Council around the proposal by persuading Washington to support an offer of incentives to Iran and by convincing Moscow and Beijing to support the threat of Security Council sanctions.

The idea, the diplomat said, is to present Iran with “a stark choice:” give up its enrichment program and gain the benefits of integration into the international community or keep the program and “suffer the consequences.” The Europeans have been trying to present Iran with such a choice since beginning talks with Tehran in 2003.

The proposal’s incentives reportedly would include a multilateral consortium to provide Iran with a light-water nuclear reactor for energy production, as well as a guaranteed supply of nuclear fuel. Similar but less-detailed incentives were contained in an August 2005 proposal that Tehran rejected at the time. (See ACT, September 2005.)

The European diplomat said that there is “nothing particularly new” about the incentives but argued that “explicit endorsement” of the proposal by Washington, Moscow, and Beijing would constitute “one key difference” between this proposal and the one offered in 2005.

The proposal, when finalized, may also address the issue of Iran’s security. Secretary of State Condoleezza Rice said in recent interviews that Washington has not been asked to provide “security assurances” to Iran. But the European diplomat said that the proposal may include the initiation of a “regional dialogue” regarding security issues in the Persian Gulf region, adding that the matter is “still under discussion.”

The proposal’s disincentives will reportedly include an embargo on exports of arms and refined petroleum products to Iran, as well as sanctions designed to target the Iranian leadership, such as a travel ban on Iranian officials and the freezing of certain Iranian assets. (See ACT, April 2006.)

The European diplomat also indicated that if Iran complies with the resolution, the Security Council will agree not to take up the nuclear issue and will instead leave the matter to the IAEA.

Iranian officials have repeatedly called for such an arrangement as Tehran is wary of the Security Council’s power to impose wide-ranging demands and penalties—power that considerably exceeds the IAEA’s authority. For example, a senior Iranian diplomat told Arms Control Today in April that Tehran is concerned that the Security Council may give IAEA inspectors unlimited authority to investigate possible nuclear-related activities in its defense facilities. Washington could use such inspections to gather military intelligence, the diplomat said, citing UN weapons inspectors’ espionage activities in Iraq during the 1990s.

Iran’s former chief nuclear negotiator, Hassan Rowhani, indicated in a letter posted on Time magazine’s website May 10 that Iran is willing to alleviate the international community’s concerns about its nuclear program by, for example, “invest[ing] the time and effort necessary to receive the IAEA clean bill of health.” The IAEA still has a series of outstanding questions regarding Iran’s nuclear activities.

Rowhani, a representative of Supreme Leader Ayatollah Ali Khamenei on Iran’s National Security Council, listed several other steps that Tehran would be willing to take, most of which have been articulated in past Iranian proposals. These include negotiating with “the IAEA and states concerned about the scope and timing of its industrial-scale uranium enrichment,” including setting verifiable limits on the production of centrifuge feedstock; and negotiating an agreement with the IAEA regarding the “continuous presence of inspectors in Iran.”

Nevertheless, it appears the two sides will have difficulty finding common ground. The Europeans will initially ask Iran to suspend work at its conversion and centrifuge facilities as a precondition for beginning negotiations, although they may ultimately agree to allow Tehran to continue conversion, the European diplomat said.

Such a compromise appears unlikely to be reciprocated, however. Iranian officials have repeatedly indicated that Iran will not stop work on its centrifuge facility.

The Europeans are not expected to offer to allow Iran to operate a pilot centrifuge facility for research purposes, although the diplomat acknowledged that the idea has been discussed. Iranian officials have said repeatedly that Iran will not forswear enrichment on its own territory.

Agence France Presse reported May 25 that, according to ElBaradei, Iranian officials have said that Tehran had “agreed in principle that for a number of years” Iran’s nuclear fuel production “should be part of an international consortium outside of Iran.” The issue of Iran’s enrichment research was “still being discussed,” he added.

In addition to proposing Iranian participation in a Russian enrichment facility, the draft European proposal would guarantee a nuclear fuel supply for Tehran by providing for a five-year enriched uranium reserve under IAEA supervision. Iran has previously expressed interest in multilateral fuel-supply schemes but has so far insisted on having a domestic enrichment capability as a hedge against possible supply disruptions.

Iranian officials, however, have said that Iran would accept limits on the number of centrifuges in its pilot facility. For example, the Iranian diplomat indicated that Tehran would have been willing in March to limit the number of centrifuges to between 164 and 500. A former European diplomat who maintains contact with Iranian officials said in a May 22 interview that, according to an Iranian official “directly involved” in the matter, Khamenei agreed in the spring of 2005 that Iran would accept a limit of 164 centrifuges.

Iran is currently operating a 164-centrifuge cascade in its pilot facility and is building two others.

But Gary Samore, a former Clinton administration National Security Council aide who maintains contact with Tehran, told Arms Control Today May 17 that Iran is determined to have an industrial-scale enrichment capability and does not want a constraint on its enrichment facilities. According to Samore, Iranian officials say privately that they want to have a “breakout capability” for developing nuclear weapons. Interestingly, the Iranian diplomat who spoke with Arms Control Today also suggested that there are some officials in Tehran who may want Iran to have a nuclear weapons option.

A former senior intelligence official offered another view. Former National Intelligence Officer for the Near East and South Asia Paul Pillar told Arms Control Today May 22 that, in his judgment, Iran is pursuing a nuclear weapons program but is not on an “irreversible course.” Pillar cautioned that such assessments are only judgments, noting that U.S. intelligence about Iran’s nuclear programs is limited.

Iranian officials have also told ElBaradei that if the negotiations resume, Tehran is willing to resume implementing its additional protocol to its IAEA safeguards agreement—another of the Security Council’s demands. Additional protocols provide the agency with increased authority to detect clandestine nuclear programs, including by inspecting facilities that have not been declared to the IAEA. They supplement mandatory IAEA safeguards agreements, which are required under the nuclear Nonproliferation Treaty.

Iran has signed but not ratified its additional protocol. Tehran had been implementing the agreement but stopped doing so in February.

Will Washington Talk to Tehran?

In recent months, calls for direct talks between Washington and Tehran have increased, particularly from members of the U.S. foreign policy establishment. Among others, advocates for such talks include one-time Bush administration officials such as former Deputy Secretary of State Richard Armitage and former Department of State Policy Planning Director Richard Haass; Foreign Relations Committee Chairman Sen. Richard Lugar (R-Ind.) and committee member Sen. Chuck Hagel (R-Neb.); former national security advisers Brent Scowcroft and Henry Kissinger, who was also secretary of state under President Richard Nixon; and William Perry, who was secretary of defense during the Clinton administration. In remarks to the European Parliament on May 30, the European Union’s foreign policy chief, Javier Solana, also suggested that Washington participate in direct talks.

Previously, the Bush administration had responded coolly to such suggestions. But White House Press Secretary Tony Snow implied a shift during a May 24 press briefing, telling reporters that Washington might be willing to talk if Tehran agreed to suspend its enrichment activities.

Rice was more explicit in May 31 remarks to the press, saying that “as soon as Iran fully and verifiably suspends its enrichment and reprocessing activities, the United States will come to the table with our EU-3 colleagues and meet with Iran’s representatives.” She said similar remarks had been delivered directly to Iranian diplomats.

She also endorsed the elements of the proposed European package of incentives and disincentives, adding that “the Iranian regime can decide on one of two fundamentally different futures for its people and for its relationship with the international community.”

However, while Rice said that President George W. Bush “wants a new and positive relationship between the American people and the people of Iran” including enhanced trade and investment, “the nuclear issue is not the only obstacle standing in the way of improved relations.” In particular, she cited Iran’s alleged support for terrorism and “violence in Iraq,” as well as claims that Tehran has interfered (through terrorist proxies) in Lebanon.

Some nongovernmental experts have argued that a lengthy May 8 letter to Bush from Iranian President Mahmoud Ahmadinejad was an attempt at a diplomatic opening, although the letter did not directly address the nuclear standoff. State Department officials have also confirmed that Iran had recently sought direct talks.

Iran has made overtures to speak to Washington in the past. In the spring of 2003, Iran sent the United States a detailed proposal for negotiations to resolve several bilateral issues. For example, Iran offered to sign an additional protocol and end its opposition to the Israeli-Palestinian peace process, according to a copy obtained by Arms Control Today.

The United States and Iran have previously said that, in principle, they are willing to discuss Iraqi security issues, but no such talks have taken place.

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